Budget makes 3 ‘big misses’: CoreLogic

Head of Australian research at CoreLogic, Eliza Owen, has outlined three areas within the federal budget that “could be done more efficiently”.

Owen said the budget missed an opportunity to optimise Commonwealth Rent Assistance (CRA) payments by “ensuring they are well targeted”.

Owen pointed towards the Productivity Commission that said in 2019–20 that 28 per cent of CRA recipients would still have avoided housing stress without the payment and 27 per cent of recipients were in the top 60 per cent of household incomes.

“CRA payments vary depending on circumstance, but the maximum rate of around $125 per week means the biggest increase under the budget will be $12.50 per week,” she said.

“As noted in our budget analysis last year, CRA increases offered by the government are very modest in dollar terms compared to actual rent increases in the private rental market.

“A broad-based boost to CRA for those already receiving it is a pretty efficient way to ensure those in more vulnerable positions in the private rental sector can remain a little more competitive in the private rental market. But optimising the payment means more funding could be allocated to those who really need it.”

Secondly, Owen said that governments should place more focus on boosting the productive capacity of the construction workforce in an “overheated” construction sector along with bolstering the construction workforce.

While the budget has allocated around $90 million towards boosting skilled worker training, Owen said that it’s “not clear when the additional workers would be added”.

“... [T]hose just embarking on the start of training certificates and apprenticeships [could potentially take years] to become fully qualified,” Owen said.

Finally, Owen said that the budget missed an opportunity to shape housing demand, aside from a more targeted and sustainable level of migration.

Tax reforms on housing have the potential to lift government revenue while shaping housing demand so that existing stock is used “more fairly and efficiently” during a time when new supply is facing hurdles in its delivery, Owen said.

“Working with state and territory governments to introduce land tax as a replacement for stamp duty, or factoring in the family home as an asset in the aged pension test, are examples of policies that can shape the amount of housing demanded,” Owen said.

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Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

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